Android - The Thorn In Apple’s Side?

I am posting this as I read through the posts. What I say may be redundant but clarity is what I am after.

Please be aware that we need to get over the Newspeak (1984, Orwell) being used in the Crap Market. We must all stand against Newspeak in any form! May I rephrase this corruption to correct English:

1. Samsung sold 2 million Galaxy Tab to market sellers. (Newspeak via Samsung: Sell in was quite aggressive at 2 million Galaxy Tablet units.)
2. Very few actual units were sold to or bought by consumers. (Newspeak via Samsung: in terms of sell-out, . . . it was quite small.)

Signature

Know History; not just your Folklore! At least until I find time to rewrite the laws of physics.

Relative to the tablet market, the answer is pretty simple: Next Gen iPad with more features, smaller and lighter, faster, with more memory, at about the same price as current generation (released in March/April), and then drop pricing on current generation and keep selling them to lock in the lower-end market. I think it is pretty obvious that Apple is very cost competitive with current product, since no reputable manufacturer is going to low-ball the market (Chinese junk? Sure, but performance will be terrible on those).

In fact, the Chinese junk when it starts to hit the market is really going to give android a bad name. People without a clue will buy a cheap iPad knock-off, suffer with the speed and usability, and then get frustrated with android stuff and maybe then save up for that iPad that all their friends are using and loving.

I am making a quick broad statement. Others here may be more knowledgeable. I will then collect my evidence and be back.

Android ?domination? numbers incorrectly and intendedly or by sheer ignorance (the act of not knowing differently or correctly, or without full knowledge) of the facts, includes non-compatible China copy-cat Android phones using a form/copy of Android that is not compatible with the Android being used in the wold outside of Asia/China; ie., the OS and the apps are not exchangeable, useable or compatible between the two Androids. There are two very different, incompatible mobile phones here. It would be akin to lumping all non Apple phones into the equation and calling them Android. This skews the number facts to a universe where 1+1 = 3 is true. This fact makes the discussion of Android phones irrelevant unless this fact ?Non-compatible Android systems vs one unified Apple IOS? is emphasized and impressed upon readers. I am sure others can better re-phrase this.

Signature

Know History; not just your Folklore! At least until I find time to rewrite the laws of physics.

I love the tease on the main page: forum members are debating whether or not Android has the better chance to chip away at the iPhone?s position.

I’m pretty sure Jeff is mocking you guys. Stay tuned next week, when forum members will debate whether or not the United States has the better chance to chip away at France’s position in world affairs.

Something Google hasn’t learned that Apple has: There are customers you can’t afford to do business with. These are the one’s who have no money, who will weasel, sneak, steal, and chisel every piece of software, music, accessories, parts, service, and support. They will whine and sue over every perceived flaw and expect to be catered to. Google and Android are welcome to service those customers as far as Apple is concerned.

I think Android is less of a thorn in Apple’s side than most of the tech press or some of the responses here.

Exactly. I was going to write my take on the emptiness of the Android threat, but you did it first and you did it better. If I may, I’d like to bounce some of my own ideas off of yours.

relentlessFocus - 02 February 2011 02:27 PM

Market share as a measure in the PC wars was an indicator and shorthand for revenue.

John Gruber had an interesting take on market share. Market share is like time of possession in a football game. The team that has the most time of possession usually wins. But time of possession is not the object of a football game, it’s only an indicator of the object. Scoring points (making a profit) is the object. Like time of possession, market share only has meaning if it leads to object. Apple currently makes 51% of profit from only 4.2% market share. Clearly market share is not the bogeyman everyone is making it out to be.

The average time smartphones spend on the market is now just six to nine months, according to HTC. But it wasn?t always this way: Average shelf time was about three years prior to 2007, HTC estimates.

The average time for all smarphones? Including the many, many failures? I?m guessing a one-year refresh cycle for the iPhone is just about right.

?The beauty of Android is that it?s completely open,? said Marcelo Claure, CEO of Brightstar, a global mobile phone distributor. ?All the equipment manufacturer has to do is slap a skin on top of it and market the phone.?

My take: ?Android is beautifl. All the equipment manufacturer has to do is slap an ugly skin on top of it to completely ruin it.?

Analysts agree that the market cycle at some point will stop shortening because customers can?t absorb new products so fast.

I would argue that that time has long since past. We just don’t realize it because we’re surrounded by geeks who have to have the latest thing all of the time. They’re on the bleeding edge. The cutting edge people get their phones updated once a year. The trendy people get their phones updated once every two years. And the average person gets there phone updated whenever.

?This will keep going until phones become just thin slabs with a touch screen,? said Soumen Ganguly, principal at Altman Vilandrie. ?It will be just like the development of the PC industry?everyone will keep trying to outdo one another to stay alive.?

His premise is exactly right and his conclusion is exactly wrong. With everyone having access to the same technological improvements, outdoing one another will be an impossibility. That’s why it’s the interface that runs those slabs and the ecosystem that surrounds those slabs that is, and will continue to be, the only meaningful differentiator.

People without a clue will buy a cheap iPad knock-off, suffer with the speed and usability, and then get frustrated with android stuff and maybe then save up for that iPad that all their friends are using and loving.

You are quite right, Ron, that the bad name will further come to the Android OS if China tries to sell its “Android” system outside China.

However, an iPad knock-off, unless it is redesigned so that it is not compatible with any Apple source - material or digital- and does not break Apple copyright, may or may not be successful in the non-Asian World. iPad knockoffs and iPhone and Android phone knockoffs are being sold in China and Asia. I don’t know how aggressive Apple wants to be with this at the moment or if it has a leg to stand on with this regard.

And yes, pricing is the key. The first iPad literally pulled the rug from under every tablet wannabe when it came out such that there is still not a viable tablet (especially comparable in size to the iPad) available. All is vapourware and until we see actual products, the discussion of such is moot.

I am hoping Apple will keep iPad1 in 16GB form and introduce iPad2 with 32/64/& 128?. Dropping the price of the iPad1 and keeping iPad2 in sync with present pricing should be about right to prevent anything but low quality, smaller sized and relative priced wannabes into the market anywhere near Apple’s pricing. To compete with Apple, Android tablets present a different kettle of fish to mobile phones.

Mobile smart phones are still phones with trinkets from which you pick and choose based upon your needs and technical expertise. Tablets are computers and business will not put up with “netbook” quality tablets. I’m fairly sure of the technoskilled who make up a small percentage of overall computer/tablet users. They like to tinker and can live with poor design. A tweak is their pleasure and makes them feel powerful.

1) The Galaxy Tab did not sell very well;
2) The Galaxy Tab had a high return rate;
3) The numbers for Android phones have been inflated by including phones that actually run a forked variation of Android.

All of that is true, but all of that is irrelevant. Even it the Galaxy tab did sell 2 million units and even if Android did grow by whatever percent, it doesn’t matter. Here’s why. (I’m stealing this straight from the Asymco blog.)

You can’t judge the relative value of products in a market when that market is supply constrained. Smartphones are growing at over 90% a year. Who knows how fast tablet sales are growing.No one is able to keep up. However, the operating system that is MOST able to keep up is the free one that can be modified at will. Asymco’s “banana” analogy is in order.

The demand for bananas suddenly explodes. Columbia produces 560 million bananas and sells every one that they make. Costa Rica produces 570 million bananas and sells every one that they make. Ecudor produces 950 million bananas and sells every one that they make. Which banana do people prefer? WE DON’T KNOW! When the best is unavailable, second, and even third best will do.

Right now the iPhone is still unavailable and the iPad has only now come into “supply balance”. But that does not mean that the iPad is available in numbers sufficient to meet demand, it only means that their are enough iPads to meet the demand in those countries where Apple makes the iPad available. The winner in a supply constrained market is not the company who can make the best or the most desirable product, it’s the company who can produce the MOST product. Android’s free and open nature makes it perfect for producing the MOST units. Only time will tell if it can maintain it’s “a-peal” and remain top “banana” when iphone production catches up to demand or whether it will “slip” back to its rightful place as second “banana”.

From AppleInsider: ?Hot on the heels of Samsung admitting that it had exaggerated sales of its Android tablet to consumers, it is becoming clear that Google’s Android platform definition is being stretched to include Chinese rivals, including China Mobile’s Ophone and Tapas OS, a project run by the former president of Google China.:

The MO hasn?t reviewed the Appleinsider article yet (if ever) but it is a very interesting read and opens up discussions regarding Apple and Android in a whole new light. I believe it is further fuel to the possibility of the desperation Android is undergoing in its attempt to usurp Apple dominance in design and build quality and salability in all IOS areas.

I see that bosco has reared his head and further wishes to spoil this part of the MOS. He destroys any forum discussion he enters where the other members willingly and often eagerly respond to his bait. Two discussion topics were destroyed by his sidetracking yesterday.

The only way for the topic of discussion to succeed is to ignore him. You cannot enlighten the mind of a man who has an agenda. It has nothing to do with intelligence or quality of argument. We?ll see if this Reader Discussion topic is made less relevant with the contributors taking the ?hook?. Any postings I will be making to the MOS will be limited to Reader Discussion and time will tell if I even stay here.

Anyway, the Appleinsider article above is a good read and Appleinsider is where I will be putting most of my reading time to good effort.

Signature

Know History; not just your Folklore! At least until I find time to rewrite the laws of physics.

1) The Galaxy Tab did not sell very well;
2) The Galaxy Tab had a high return rate;
3) The numbers for Android phones have been inflated by including phones that actually run a forked variation of Android.

? All of that is true, but all of that is irrelevant.

? You can’t judge the relative value of products in a market when that market is supply constrained.

? When the best is unavailable, second, and even third best will do.

? Right now the iPhone is still unavailable and the iPad has only now come into “supply balance”(.) . . . to meet the demand in those countries where Apple makes the iPad available.

? The winner in a supply constrained market is . . . the company who can produce the MOST (not best) product.

? Only time will tell if it (Android) can maintain it’s “a-peal” and remain top “banana” when iphone production catches up to demand or whether it (Android) will “slip” back to its rightful place as second “banana”.

? ? ? ? ? ? poignant

Excellent, FalKirk. One can so easily get blinded to circulator thought which closes the door to the greater reality. Every now and again we all need a good kick to open our locked doors.

Signature

Know History; not just your Folklore! At least until I find time to rewrite the laws of physics.

Normally market share matters because market share times margin equals total profit. Is Apple’s lack of market share hurting or threatening their profits? No. Apple is selling every phone that they can make at their normal margins.

Normally market share matters because that is the way to attract developers who create the programs that attract the buyers who buy the phones that create the profit. Is Apple’s lack of market share hurting or threatening to hurt their platform? No. Apple’s platform is robust because everyone in the virtuous cycle - developers, buyers, Apple - is being rewarded. Android has INHERENT issues that make it difficult for their platform to benefit from that virtuous cycle.

Normally market share matters because Brand is a powerful shortcut that assists consumers in making future purchasing decisions. Is Apple’s lack of market share hurting or threatening to hurt their brand recognition and future sales prospects? No. Apple’s brand is strong and it’s desirability is supreme. One question that has never been answered to my satisfaction is whether normal consumers even KNOW that Android is a brand. In any case, it’s becoming clear that it’s not which phone one purchases first, it’s which phone the consumer purchase when given a choice. So far, the evidence overwhelmingly indicates that when given a choice between an Apple product and an Android product, people choose the Apple product.

snip…
Normally market share matters because market share times margin equals total profit. Is Apple’s lack of market share hurting or threatening their profits? No. Apple is selling every phone that they can make at their normal margins. snip.

This captures the craziness of comparing OS market share in the smartphone world. Market Share times margin yields nothing to Google, as we all know, Google is playing a different game entirely (one in which the early results are not super comforting I might add which is why Google stock is going nowhere!). But Google gets no revenue from Android market share.

If you want to look at market share when examining smartphones you have to compare handset makers, not OS’s. Apple to LG to HTC to Samsung to Sony to Motorola. Asymco, as always, has made a chart.

Market share only matters as a measure when you’re comparing like to like. And then you can see who dominates.

Signature

Just a WAG, but I think that tablets and phones will end up the way mp3 players ended up: Apple dominates, and everyone else fights over crumbs.

The network effects of the iOS user base, apps, third party connected peripherals, iTunes, etc, just doesn’t make it worth it to save $100 by buying something else.

Apple seems very focused with all iOS products on not leaving a pricing umbrella. They will lower the cost of their products over time so that they are generally not more than $100 over a decently made alternative. Because of Apple’s pricing advantages for parts and manufacturing, the margin be much greater than $100.

When the iPad is $299, Apple’s margin will be near 50%. You will be able to buy a decent alternative for $199, but most people, even of modest means, will pay the extra $100 to get the Apple product everyone else has. There will also be $99 tablets, but the folks who buy them will continue to regret all their purchase decisions until they finally learn the lesson that “you get what you pay for.”

Market Share times margin yields nothing to Google, as we all know, Google is playing a different game entirely (one in which the early results are not super comforting I might add which is why Google stock is going nowhere!). But Google gets no revenue from Android market share.

Normally market share matters because market share times margin equals total profit. Is Android’s market share multiplying their margins? No. Because Google doesn’t have any margins with Android.

Normally market share matters to an advertising company because market share equals eyeballs which equals ad revenue. Is Android’s market share increasing their revenue? Maybe, maybe not. We don’t know and Google isn’t saying. But I know of at least two facts that indicate that Google may not be profiting from Android. The first is that they refuse to divulge Android specific revenue numbers. That is telling. The second is that sales of Android specific vendors seems to have slowed while the sales of Android knockoffs like Ophone and Tapas seems to have grown. Google makes no money from advertising if their Google products are stripped from Android. Is that happening? Only Google knows. And they’re not saying. And their silence is deafening.